2017 (8) TMI 357 - AT - Service Tax

Recipient of service - GTA Services - Reverse Charge Mechanism - abatement under N/N. 1/2006-ST dated 01/03/2006 - Held that - Revenue has not established that the services received by the appellant were qualified to be classified as Goods Transport Agency Service and hence the charges that the appellant had received service of Goods Transport Agency are not proved - demand not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Compliance to High Court order regarding Central Excise Appeal
- Liability of the appellant to pay Service Tax as a recipient of Goods Transport Agency Service
- Validity of show cause notice dated 26/05/2008
- Invocation of Section 66A and Rule 2(1)(d)(v) of Service Tax Rules, 1994
- Admissibility of abatement under Notification No.1/2006-ST
- Requirement of specific declaration on consignment note
- Definition and proof of Goods Transport Agency Service

Analysis:
The judgment by the Appellate Tribunal CESTAT ALLAHABAD pertains to a case where the appellant, a company owned by the State Government of Uttar Pradesh, was alleged to have utilized Goods Transport Agency Service without paying the required Service Tax. The proceedings were initiated based on a show cause notice issued by the Additional Director General DGCEI New Delhi in 2008. The notice invoked Rule 2(1)(d)(v) of Service Tax Rules, 1994, alleging the appellant's liability to pay Service Tax on freight for the transportation of goods. The notice also questioned the admissibility of abatement under Notification No.1/2006-ST and proposed penalties under various sections of the Finance Act, 1994.

The Tribunal's analysis focused on the validity of the show cause notice and the invocation of relevant legal provisions. The appellant argued that the rules cited in the notice were ultra vires as per a Supreme Court ruling and that Section 66A was available for fixing liability on the recipient of service. The Tribunal considered these arguments alongside the Revenue's contention that the grounds raised by the appellant were not part of the appeal.

Ultimately, the Tribunal found that the Revenue failed to establish that the appellant had received Goods Transport Agency Service as alleged in the show cause notice. It noted the absence of consignment notes, a requirement for proving the receipt of such services. As a result, the Tribunal held that the notice was not sustainable, leading to the setting aside of the impugned Order-in-Original and allowing the appeal in favor of the appellant. The judgment emphasized the importance of evidence and specific requirements for proving the receipt of services under the relevant tax regulations.

In conclusion, the Tribunal's decision revolved around the lack of proof regarding the appellant's receipt of Goods Transport Agency Service, highlighting the necessity of meeting specific criteria and providing adequate documentation in tax-related matters. The judgment underscored the significance of adherence to legal provisions and the burden of proof in tax liability disputes, ultimately resulting in the appeal being allowed in favor of the appellant.